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NATIONAL ECONOMICS UNIVERSITY

BTEC HND IN BUSINESS AND MANAGEMENT
Assignment Cover Sheet
NAME OF STUDENT
REGISTRATION NO.
UNIT TITLE
ASSIGNMENT TITLE
ASSIGNMENT NO
NAME OF ASSESSOR
SUBMISSION DEADLINE

Nguyn Vnh Tr
1013105035
Unit 7: Business Strategy
Strategy Formation and Planning
1 of 2
Ha Son Tung
16:00, 22 November 2010

I, __________________________ hereby confirm that this assignment is my own work and not
copied or plagiarized from any source. I have referenced the sources from which information is
obtained by me for this assignment.

________________________________

_________________________

Signature

Date

---------------------------------------------------------------------------------------------------------------FOR OFFICIAL USE

ASSIGNMENT GRADE

Common Skills Grade

A

Unit outcomes
Outcome

Analyse how the

business
environment is
considered in
strategy
formulation.
(1)

Understand the
process of
strategic
planning.
(2)

Evidence for
the
criteria

Assessors
decision

Feedback

Define the
context of
business
strategy

Explain the
significance of
stakeholder
analysis

Conduct an
environmental
and
organizational
audit of a given
organization

Apply strategic
positioning
techniques to
the analysis of
a given
organization

Demonstrate
ability to think
strategically

Prepare a
strategic plan
for a given
organisation
based on
previous
analysis

Merit grades awarded

M1

M2

M3

Distinction grades awarded

D1

D2

D3

Internal
Verificati
on

Assignment
( ) Well-structured
Reference is done properly / should be done (if any)
Overall, youve

Areas for improvement:

ASSESSOR SIGNATURE

DATE

NAME:.........................................................................................

(Oral feedback was also provided)

STUDENT SIGNATURE

DATE

DATE

NAME :..............................................................................

FOR INTERNAL USE ONLY

VERIFIED

YES

NO

VERIFIED BY : ...........................................................................
NAME

: ...........................................................................

COMMON SKILLS & COMPETENCIES ASSESSED (indicated by X)

A. MANAGING & DEVELOPING SELF

D. MANAGING TASKS & SOLVING PROBLEMS

X
X

1. Managing own roles & responsibilities

2. Manage own time in achieving objectives
3. Undertakes personal and career development

12. Use information sources

13. Deal with a combination of routine & non-routine tasks
14. Identify & solve routine & non-routine problems

4. Transfer skills gained to new/changing situations & contexts

E. APPLYING NUMERACY
B. WORKING WITH & RELATING TO OTHERS

15. Applying numerical skills and techniques

5. Treat others beliefs and opinions with respect

6. Relate & interact effectively with individuals & groups

F. APPLYING TECHNOLOGY

7. Work effectively as a team member

16. Use a range of technological equipment and systems

C. COMMUNICATING

G. APPLYING DESIGN AND CREATIVITY

X
X
X

8. Receive and respond to a variety of information

9. Present information in a variety of visual forms
10. Communicate in writing
11. Participate in oral & no-verbal communication

17. Applying a range of skills and techniques to develop a

variety of ideas in the creation of new / modified products,
services or situations
18. Use a range of thought processes

A.

Introduction..................................................................................................................6
BMW Group and its context of business strategy...................................................6
1. Introduction about BMW Group..........................................................................6
2. Vision and mission of BMW...............................................................................7
II. Stakeholder analysis................................................................................................8
1. Internal stakeholders..........................................................................................11
2. External stakeholders.........................................................................................12
3. Connected stakeholders.....................................................................................12
B. Contents.....................................................................................................................13
I. External environment and organizational audit of the company...........................13
1. External environment audit................................................................................13
2. Organizational audit...........................................................................................19
II. SWOT analysis......................................................................................................23
III.
Strategic positioning..........................................................................................24
IV.
The current external environment in Vietnam...................................................26
V. Strategic planning for BMW in Vietnam...............................................................28
C. Conclusion.................................................................................................................31
D. Reference...................................................................................................................32
I.

A.

Introduction

I. BMW Group and its context of business strategy

1. Introduction about BMW Group
BMW stands for Bayerische Motoren Werke which is the most important
automobiles producer in Germany.
On the March 22nd, 1929 BMW produced the first car. From that day, lasting long
together with the history, BMW is currently one of the most powerful companies in
the car industry.
To see how powerful the company has become, we should look at the annual sales
report below:

BMW is producing many kind of production including cars, motorbike, sporting car,
racing car and even bicycles.
BMW is now expanding into many countries and regions:

The USA

The South Africa

The India

China

Canada

Australia

Egypt

Vietnam

BMW is currently owned by the Quandt family (46.6 % of shares), the Allianz
(6.52%) and 48.8% of shares that owned by other companies.
2. Vision and mission of BMW
Every company has its own vision and mission statements which are considered as
the guide for strategic planning and the way that company will go in the future.
Vision
To be leading provider of premium products and premium services for individual
mobility
Mission

Focus consistently on growth and profitability

Constant develop new technologies

Guarantee access to relevant customer groups

Actively shape the future.

87,306 BMW motorcycles were delivered to customers in 2009, compared to

101,685 in 2008, a moderate decrease of 14.1%.
While the world market for motorcycles above 500c was still approximately 1.5
million vehicles in 2007, it shrank to about 900,000 units in 2009.
In Germany which is still the biggest market for BMW Motorrad, 15,833
motorcycles were sold in 2009, compared to 18,112 in 2008, representing a drop of
12.6%
Italy continues to be the second largest market for BMW Motorrad. Here a total of
13,207 BMW motorcycles were registered (previous year: 15,342).
In the USA, BMW Motorrads third largest market, the market as a whole decreased
by 41.6%.
As you can see, the BMW Motorrad keeps failing in three big markets. Some people
will say that BMW hasnt achieved its mission and follow the vision because of
these numbers above. However, we have to look back at the crisis in 2009 to
understand how much effort that the company has tried. Its fair to say that BMW
havent only reached the target itself but also achieved the second lowest decline in
sales amongst the competition.

II. Stakeholder analysis

Stakeholders are known as everyone who affect or are affected by the behavior of the
organization so that every company has its stakeholders. . There are three types of
stakeholders in an organization: internal stakeholders (employees, management),
connected stakeholders (shareholders, customers, suppliers, financiers) and external
stakeholders (the community, government, pressure groups).

BMW

Connected
Stakeholders

Internal
Stakeholders

Managers

Employees

Shareholders

Financiers

Suppliers

External
Stakeholders

Customers

Competitors

Government

Pressure
groups

However, in some documents, you will probably see that they divide the stakeholders
into two groups like this:
8

From their interest, there is response risk made for the company which is shown in the
table below:
Stakeholder
Internal

Interests to defend
Jobs/ careers

Managers and employees

Money

goals rather than

Promotion

shareholder interests

Benefits

Industrial action

Satisfaction

Negative power to

Response risk
Pursuit of systems

impede
implementation

Connected
Shareholders

Increase in
shareholder wealth,
measured by
profitability, P/E
ratios, market
capitalization,

Refusal to relocate

Resignation
Sell shares or replace
management

dividends and yield

Banker

Risk

Security of loan

Denial of credit

Adherence to loan

Higher interest
charges

agreements
Suppliers

Customers

External

Receivership

Profitable sales

Refusal of credit

Payment for goods

Court action

Long-term

Wind down

relationship

relationship

Goods as promised

Buy elsewhere

Future benefits
Jobs, training, tax

Sue
Tax increases

Regulation

Legal action

Government
Interest/ pressure groups

Pollution

Publicity

Rights

Direct action

Other

Sabotage

Pressure on
government

To analyze the stakeholders, BMW is suggested to use the influence/care matrix below. It
will show the relationship as well as the solution and treatment for each type of
stakeholders.

10

1. Internal stakeholders
The employees of BMW can be divided into two groups: Office employees and
manual labors.
In one hand, the office employees are the main force to ensure that the business of the
company can run smoothly. In another hand, labors are the force that directly works
on the products of BMW. Normally, this group has low care as well as the influence
on the company. The managers just have to satisfy them so that they will work well.
However, in some special situation for instance, the company break the contract, this
group will become the main factors that decide the existence of the company.
The managers are the group that care and affect directly to the company. Its not
randomly that BMW can make the sales in the table below

11

Its the result of the effort that the board directors of BMW as well as the manager of
BMW in all over the world have made.
2. External stakeholders
Beside the high tax in some country, the governments in many countries seem to
support BMW because of the environment protection technology that BMW is
applying for all of its automotives.
The community is another external stakeholder. Its all about the ethical responsibility
and the image of the BMW in the society. This stakeholder has many and big
objectives, such as increasing services to local community, education, aid programs,
doing charity It is clearly to see that to achieve objectives of community, BMW
has to involve in some activities above. However, BMW currently has the advantage
they are trying their best protect the environment by developing new technology
which is also creating a lot of jobs so that they own the support from the society at
this moment. In addition, their social responsibilities are conducted, they have right
way to succeed.
3. Connected stakeholders
Shareholders: The management of a business has only one social responsibility
which is to maximize wealth for its shareholders. The first thing that shareholders care
is that their money which is invested in the company can make profits or not. The
shareholders are the one who contribute a lot to the company and they deserve to have
a right treatment from the company.
Suppliers: They impact directly on production activities of BMW because raw
material or electric are all important factors to run production. The amount of money
spending for this group is a factor that decides the price of the product so that in order

12

to have stable supplying as well as the lowest prices as possible, BMW should build
up a long- term relationship with the suppliers. Over than that, BMW always call their
suppliers to participate in protecting environment programs.
Customers: Because of the high-price products that BMW is providing, the
customers of the company are the people who have finance ability so that the
influence of them on the company is unpredictable. This group is always supporting
BMW and they are willing to join in the environment protection programs of BMW to
improve their image. Thanks to them, the image of BMW is also better as a
consequence.
Competitors: There is a fair competition between BMW and other automobiles
producer. Day by day, more and more products appear under attractive design and
special function by the talented hand of BMW. But not only BMW knows how to
create values and bring it to customers. At this moment, after the crisis, every
company is rushing themselves because many opportunities is revealed by the crisis.
Thus, BMW always keeps working and being creative to achieve their mission and
objectives.
B.

Contents

I. External environment and organizational audit of the company

1. External environment audit
To understand clearly about the external environment, PESTEL and Porters five forces
are the best tools to analyze the elements of external environment. The external
environment includes the macro environmental factors and micro environmental factors.
a. Macro factors: Macro factors can be determined based on PESTEL analysis.
(Political, Economic, Social, Technological, Environment and Legal)

13

Political
BMW Groups is current working in many regions over the world so that its
very difficult to identify how political affect BMW. In the Europe area, the
importing tax of car is much lower than the tax in Asia and others. In Vietnam,
the tariff of car is 80% and in China it is 40%. In the Europe, the tax is only
about onehalf or even one-third in compare with Vietnam.

Economic
The crisis in recent years has destroyed the demand of customers. Instead of
satisfy the needs, wants, and demands, the customers seem to be more
carefully by keeping their money in the bank. In this period, every company
including BMW agrees that they are very lucky if they can meet the break
even. BMW stated that they have not only reached the target itself, but also
achieved the second-lowest decline in sales amongst the competitions. At this
moment, BMW should run more marketing campaign rather than do more
cutting down. The products of BMW are almost luxurious items so that only
person or group which has ability in finance can buy. When the economy of
the world goes down, buying a luxury car does not harm these people or group
at all so that running market penetration strategy is the best way to overcome
this dark period. We can take an example of Europe area GDP:

14

At the beginning of 2009, the GDP of this area dropped dramatically. This is
also the time that BMW cut down the salaries, workforce and many
departments. Then, the Europe started to recover however, because of the
influence of the crisis, the buyers are still aware and the sales of BMW are
very low in compare with Honda and Chevrolet in this table below:

15

Social

16

As we all know, the products of BMW are luxurious items with very high
price and the current strategy of BMW is focus differentiation. So that the
affect of society on the company isnt a big problem when the company
policies is oriented to the green engine and protect the environment. BMW
always conveys the image of the ultimate driving machine which is promised
to bring more values to the customers.

Technology
Recently, there is a clear trend that the customers love to experience in many
new kinds of cars. If they want to succeed in business, automotive
corporations must continuously innovation, creativity to satisfy all the needs
of customers. BMW Group is changing its technology day by day to compete
with Mercedes. The competition between these big-two in Germany is making
breakthroughs in technology and creates more unique products to meet the
customers satisfaction.

Environment
According to a study by Environmental Defense (reported by CARS guide),
BMW wins the "most improved" award for its average fuel efficiency and
CO2 emission rate. BMW offers 49 models with EU5/6 emissions norm and
nearly 20 models with CO2 output less than 140 g/km, which puts it on the
lowest tax group and therefore could provide the future owner with eco-bonus
offered from some European countries. In the early 2007, the position of the
Group Representative for Sustainability and Environmental Protection was
assigned to the Corporate Strategic division. All these move above shows that
BMW is aiming to build a car brand which is known as environmental
protector.

Legal
Legal factors include some laws, such as health and safety laws, employment
law, consumer law. This kind of factors affects ways to operation of BMW
and demand of customers for its products. In this case, particularly, there is no
law to affect negatively to operation of BMW except the high tax in some
country.

b. Micro factors:

17

Micro factors can be analyzed by the Porters five forces model.

Threat of new entrants

Starting a business about car is very easy but to be a leader like BMW Group
is a totally different story. With the advance in technology as well as the
design, BMW is always known as a ultimate driving machine provider and
ultimate high-price car maker. Because of this reason, BMW doesnt have to
put too much attention in the new entrants in the segmentations that BMW is
focusing on.

Threat of substitute products

BMW automotives are shaped, gentle and luxury. BMW automobiles have
perfect quality, unique design and style. The only thing that customers will
consider is the price of BMW cars is too high in compare with the average.
Because of this weakness, the other brands like Honda, Mazda jump in the
market and provide cheaper car with the same features like BMW products.
This is the substitution threat of BMW and the company need to do more
R&D to create more values and innovate so that the others will be difficult in
making substitution.

Bargaining power of customers

18

Let imagine that one day you meet your friend and you say that you just
bought a new BMW X6 at the price of 100,000 when the real price of a
BMW X6 is 120,900. Will you proud of that car? Will your friend believe
that the car you have bought is real?
In the case of luxurious items like BMW products, the customers dont have
any chance to bargain so that even when the company establishes a very high
price in compare with the real price, many customers are still willing to buy
with a smile on their face.

Bargaining power of suppliers

In this industry, raw materials which BMW needs should be ensured about
quality, because all of them relate directly to quality of products. Particularly,
BMW Group has fix suppliers to ensure stability of resources as well as stable
cost. Moreover, it is not easy to find new suitable suppliers for the Group so
that bargaining power of suppliers is very high and switching of cost is also
high.

The rivalry among current competitors

The car industry has very high market growth rate because of the frequently
innovation. Every company compete directly with each others and create a
pressure on this industry which forces everything grow faster and faster. The
story of the competition between BMW Group and Mercedes is a good
example of rivalry among current competitors. However, BMW should
consider about the exit barriers because base on the current situation and the
economic of scale of the company, its almost impossible for BMW to
withdraw from this sector.

2. Organizational audit
a. The position audit
The human resources: BMWs employees have important qualifications and
skills to meet requirement of technological jobs. Every single employee who
works directly or indirectly in a process of making a car has to understand
about the technology that the company is applying. To create a brilliant car,
you have to have brilliant employee.
Finance resources: BMW has a strong financial capacity. Being a big group
means that it always attracts many investors. The shareholders are the Quandt
19

family (46.6%), the Allianz company (6.52%) and 48.88% of others company
which has 40% of shares belong to the big companies. These numbers show
that the finance sources of BMW are various and very stable which can be a
factor that help the company overcome the period of the crisis.
Technology: The innovation and the effort to innovate of BMW automobiles
are appreciated by the customers. Rising up from the collapse after the World
War II, BMW bring all their knowledge about the engines of plane into car
industry. From that moment, nothing can stop BMW on the way of
development.
b. Core competencies
In this case, BMW has some core competencies below:

High experiences in manufacturing automobiles

Reputation of brand

Advance technology

Strong and stable finance sources

Core competencies make competitive advantages for BMW. Using core

competencies, BMW become one of the biggest companies in the world.
Moreover, the Group is close to their customers and has a number of loyalties
that rarely any competitors can reach.
c. Value chain
The value chain model which was developed by Michael Porter offers a
birds eye view of the firm and what it does

20

In this model, there are two kinds of activity. They are primary activities
(Inbound logistics, Operations, Outbound logistics, marketing and sale, after
sales services) and support activities to support the primary activities
(procurement, technology development, human resource management and
management planning).
Inbound logistic

Its the way that BMW receives handles and stores inputs to
the production system: warehousing, transport, stock control

Operations

and so on.
Its the activities when BMW convert resources inputs into a

Outbound logistic

final product. (including human resources, capital, etc)

Outbound logistic is the process which stores the product and
its distribution to customers. (car testing, delivering to the

Marketing and sales

dealers, etc)
This is the stage where BMW inform customers about the
product as well as persuading them to buy it. In another word,
it belongs to marketing activities like advertising, promotion,

After sales service

P.R. etc
During the time using the products of BMW, if the customers
have any problems, the company has the responsible to solve.
(repairing or upgrading the products, driving guideline, etc)
21

d. The product portfolio

BMW makes a lot of different automobiles and each of them has its own
characteristic. Thus, understanding about life cycle of products helps BMW
reducing risk and making use of advantages.

This chart shows the life cycle of the products which is very important to
BMW. By using this chart, the company can know which stage that their
products are standing. After that, the company builds up a suitable strategy to
develop and grow in the correct direction.
e. Organization structure
Organization structure determines how work is allocated, directed and
controlled, in order to achieve the goals of the organizations strategy.
Mintzberg and Quinn (1999) have studied the organization and conclude that
successful organization change arises from the following interdependent
factors which is describe by the model below:

22

To have a strong structure, BMW should concern about these following thing:

Job specialization (The number of tasks ad the division of labor)

Behavior formalization (Having standard to work processes)

Training (Training employees)

Indoctrination ( Teaching the employee the experience)

Unit grouping (Having functional departments)

Unit size

Planning and control systems

Liaison and communication (Having communication channels, such as

networks, matrix structures)

II. SWOT analysis

SWOT analysis is a strategic planning method to measure Strengths, Weaknesses,
Opportunities and Threats. After identifying these elements, the company can build up a

23

new strategy to solve the current problems or to develop itself in the future. The table
below is the SWOT analysis of BMW:
Strengths
BMW automobiles are powerful,

Weaknesses
The products is not exceptional

reliable and luxurious

The product is expensive

Advance technology

The focus-differentiation strategy

Having a long time developing

Convenient design and traditional style
Control the distribution network tightly
High quality products
Reputation of brand
Close to the buyers
Well relationship with suppliers
Strong and stable finance sources
Opportunities
Product and services expansion

Threats

Competition

Economic slowdown

Generally, BMW can proud that they are one of a small group overcome the crisis. The
fact is they had been making lost in recent year which led to the cut down in employment
and many other departments in 2009. This strategy helped the company survived from the
crisis however, BMW should remain this strategy at this moment. Instead of trying to cut
down and improve the weakness, the Group should use its strength to catch the chance,
make the opportunity come true and build up a strategy to deal with the threats.

III.Strategic positioning
To apply the strategic positioning, every company usually uses the Annsoffs matrix:

24

Ansoff created a growth vector matrix to describe a combination of activities in

current and new markets, with existing and new products to apply the suitable strategy.
Market penetration strategy should be use when the company wants to develop the
current products in the present market. The main aim of this strategy is to maintain or
even improve the market share as well as the sales. This strategy is using the effort of
marketing as the main weapon. In another words, BMW will have to invest more
money in Marketing in order to increase the sales. At this moment, this strategy seems
to be most reasonable for BMW. The consequence of the crisis has brought all the
companies into really bad situation at every side. To improve the profits, BMW has to
options: doing cutting down or do something to increase the sales. If BMW does the
cutting down in employments, material, etc the company will get itself into another
problems the company will not meet the consumers requirements and lose the
customers. The second option is improving the sales but how can BMW increase their
sales? The key answer is Marketing. The history is supporting the second option.
During the crisis in 2001, Dell and Wal-mart increased the amount of money
that use for running marketing campaigns.
During the 1980s, some B2B form companies remained or increased marketing
budget then their sales rocketed to 256% in the crisis year and also the next three
year. ( according to McGraw-Hill research)

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 According to the survey result of the CMO Club in 5/2008, 71% of participants
responded that their marketing budget has not been cut in 2008, while only 14%
revealed that they saw the prospect of cuts required because of the pressure of
the crisis.
Investing in marketing at this moment is a smart choice for BMW to gain more profits
and keep the market share as well as compete with its competitors.
The market development strategy is applied when a company wants to sell its current
products into a new market. This strategy doesnt require a huge amount of money
investing in marketing but its very important to build up a suitable marketing plan to
apply in that new market. In the case of BMW, because the products of BMW are
expensive so that even when the company runs a perfect marketing campaign in a
developing country like Vietnam, the sales will rarely increase.
When a company wants to produce new products in its current market, the product
development strategy is the most suitable one. This strategy basically works on the
effort of R&D (Research and Development). BMW has been putting a lot of money into
the R&D department to make highly competitive factors in their automobiles. BMW
reputation together with R&D, the satisfaction of customers will be fulfilled.
Diversification is usually used when the company jumps a market at the first time with
very new products. This strategy will cost a lot of money because the company has to
start every thing from the beginning. There is nothing can ensure the success of the
company so that this strategy is a high-risk strategy even for a big company like BMW.
IV. The current external environment in Vietnam
External environment
Politics

Vietnam market
Vietnam is a country which has stable
politics

with only one

party. Vietnamese

Government has the policy to protect foreign

investment and encourage foreign firms to invest
into Vietnam, especially until Vietnam became a
member of WTO. The importing tax rate at this
moment is very high at about 80% however, in

26

the next 3 years, that tax must be decreased

according to the rule of WTO.
In 2009, the growth rate of Vietnam is 6.2%,
ranking 55th in the world (CIA World Factbook,
2009). However, do almost the customers meet
the segmentation of BMW? The answer should
be NO because the products of BMW are too
expensive for the income of almost Vietnamese.
Economic

But it doesnt mean that the focus-differentiation

strategy of BMW wont work in Vietnam. There
are many customers from the upper class who are
willing to pay a lot of money to have a BMW
automobile.

Vietnamese has a habit that is very Asian.

That habit is the willing to buy things at higher
price to get confidence proud. BMW can use this
Social

habit

of

Vietnamese,

together

with

the

segmentation that the company is following to

increase the sales.
Recently, there is a clear trend that the
customers love to experience in many new kinds
of cars. If they want to succeed in business,
automotive corporations must continuously
innovation, creativity to satisfy all the needs of
Technology

customers. BMW Group is changing its

technology day by day to compete with
Mercedes. The competition between these bigtwo in Germany is making breakthroughs in
technology and creates more unique products to
meet the customers satisfaction.

27

Vietnam is a tropical country and the

weather is very different from Germany or the
USA. Thus, BMW products should be changed
to be suitable for Vietnamese climate.
Environment

More than that, the environment protection

cars

of

BMW meet

the

requirement

of

Vietnamese which is trying to create a green and

clear environment.
- 1st July 2006, the Investment Law and
Enterprise was issued to make fair between
foreign and domestic firms
Legal

- CIT- taxable profit for foreign firms- is ranged

from 10% to 28%
- VAT is from 0% to 10%
There is no new hidden competitor of BMW

Threat of new entrants

in Vietnam. Its always some familiar brands

such as Honda, For, Mazda etc.
There are a little cars that can be the

Threat of substitute products

substitution of BMW cars so that BMW doesnt

have to worry about this problems.
Because BMW automotives is imported

Bargaining power of suppliers

from other countries so that BMW dont need

any supplier in Vietnam. Instead of supplier,
BMW need more franchisors at this moment.
In the case of luxurious items like BMW
products, the customers dont have any chance to

Bargaining power of buyers

bargain as I said before so that even when the

company establishes a very high price in
compare with the real price, many customers are

The rivalry amongst current

competitors in the industry

still willing to buy with a smile on their face.

In this market, BMW has the same
competitors (Ford, Honda, etc) like in other
markets so that the Group already know how to

28

deal with these competitors

V.

Strategic planning for BMW in Vietnam

After understanding about the external environment of Vietnam, BMW should
consider about the SWOT analysis below:

Strengths
BMW automobiles are powerful,

Weaknesses
The products are not unique enough to

reliable and luxurious

ensure the leader position.

Advance technology

The product is expensive

Having a long time developing

The focus-differentiation strategy

Convenient design and traditional style

Control the distribution network tightly
High quality products
Reputation of brand
Close to the buyers
Well relationship with suppliers
Strong and stable finance sources
Opportunities
Product and services expansion
Create a low price and high quality car
for Vietnamese with the factory located

Threats

The competitions keep chasing.

Economic slowdown

in Vietnam.
Bringing the BMW motorbike closer to
Vietnamese customers.
According to the SWOT analysis, we can see that by using the advance technology,
BMW has the ability to create the new series of cheap car which is still convenient
design and traditional style.
When we look at the Annsoff matrix, we can see that if BMW want to make the
opportunity comes true, the company will apply the diversification strategy (new
market and new products) however, its safer for BMW if they apply the market
development at this time.

29

The fact is the economy of Vietnam just recovers from the crisis so that even if BMW
run a new campaign about a new series of cheap car in Vietnam, no one will buy. At
this moment, BMW should bring their current automobiles to create a good base to
expand the segmentation later. Further more, Ford, Honda, and Toyota are creating a
triangle in the car industry in Vietnam. If BMW wants to break that big-three, the
company needs to prepare well and build up a correct strategy.
No one knows how the car industry situation will become if BMW jump into all the
segmentation that other companies choose. BMW may become the leader and
dominate the Vietnam domestic car industry or all these companies will reunite and
establish a new force which will directly fight with BMW.
By overview the external environmental, the SWOT matrix and Annsoffs matrix,
BMW should consider about the vision and mission statement that I recommended
below:
Vision: To become the leader in automobiles industry in Vietnam as well as dominate
all the segmentation that possibility exist in Vietnam.
Mission:

Expand the BMW headquarter in the South, North and middle of Vietnam
which could be allocate in the big city like Hanoi, Hue, Danang and Ho Chi
Minh City.

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Research and develop the new series of cheap car that can provide to the
customer in the next 3 years when the importing tax of Vietnam must be
decreased according to the WTO rules.

Prepare for a totally marketing campaign which will be run in the moment that
every company in this region rushes back into the market.

Building a technical college under the name of BMW which can provide a
stable high skill workforce for the company.

C.

Conclusion
The previous analysis has shown a background about BMW Group as well as
made a strategic planning for the company to penetrate into Vietnam. Although crisis
in 2009 was very terrible which affected to almost all industries and caused lots of
consequences, BMW still developed and achieved the second lowest decline in sales
amongst the competition. With experiences and suitable planning, BMW can become
the leader of automobiles industry in Vietnam if the company can build up suitable
strategy as well as identify the vision and mission clearly. In the future, BMW will
become a familiar brand name in Vietnam in compare with others.

D.

Reference
All the information as well as pictures and charts are referenced in these links below
http://www.wikiswot.com/SWOT/4_User_Generated/BMW.html
http://www.tin247.com/doanh_thu_tut_giam_bmw_cat_giam_luong-1421399147.html
http://www.whatmakesagoodleader.com/macro-environment-analysis.html

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http://www.tin247.com/thue_oto_o_trung_quoc_xe_lon_40%2C_xe_nho_1-384039.html
http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=EUR
http://www.bmwblog.com/2010/05/05/automotive-sales-in-april-2010-bmw-vs-theothers/
http://notesdesk.com/notes/strategy/porters-five-forces-model-porters-model/
http://en.wikipedia.org/wiki/BMW
http://www.12manage.com/methods_porter_value_chain.html
http://212.85.13.29/podcast/?p=350

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